Question - Corporate Jet Inc. started its business on 1/1/2015. During 2015, the company have the following 4 transactions:
1. On Feb. 1, Issue a note of $120,000 to bank (one year, annual interest rate 3%) for cash. Interest is not paid until 2016.
2. On July 5, purchase merchandise from Maida for $33,000.
3. On August 1, sell merchandise to Lachey for $80,000 in cash.
4. On October 5, purchased a building for $100,000.
Requirement:
i) For each transaction, prepare a journal entry and classify the change in cash as Operating (O) or Investing (I) or Financing (F).
ii) Prepare a statement of cash flow using the "very direct method".